Trudeau Government Subsidizes Yet Another EV Project
Northvolt, a Swedish battery manufacturing behemoth, has unveiled plans to construct a groundbreaking multibillion-dollar electric vehicle battery plant to the east of Montreal. Quebec’s leaders are hailing this initiative as the most significant private investment in the province’s history.
Prime Minister Justin Trudeau and Quebec Premier François Legault, accompanied by other ministers and Northvolt executives, made the announcement in Montreal on Thursday.
This mega-factory, marking Northvolt’s first venture beyond Europe, will span a sprawling 170-hectare site near Saint-Basile-le-Grand and McMasterville, approximately 30 kilometers east of Montreal.
In its initial phase, the project, boasting a total investment of $7 billion, will boast an annual battery cell manufacturing capacity of up to 30 GWh. Furthermore, it is poised to generate up to 3,000 jobs as it reaches peak production capacity.
Although no timeline has been provided for the second phase, which is anticipated to double the output, Trudeau asserted, “This is a historic and transformative announcement.” He emphasized that this investment would establish “end-to-end battery manufacturing” in Canada, capable of producing batteries for up to a million electric vehicles annually, with the plant contributing as much as a claimed $1.6 billion to the country’s economy at full production.
In addition to battery manufacturing, the facility will house facilities for cathode active material production and battery recycling.
Quebec and Ottawa will jointly invest $2.7 billion for the factory’s construction, with completion expected by the end of 2026. Both Canada and Quebec are committed to supporting Northvolt’s production on par with the Inflation Reduction Act’s Advanced Manufacturing Production Credit in the United States, amounting to up to $35 US per kWh. Furthermore, the company stands to gain government production incentives totaling $4.6 billion over the next five to nine years, with a third of this sum provided by the Quebec government, totaling an additional $1.5 billion from the province.
Legault lauded this announcement as “the biggest private investment in the recent history of Quebec” and emphasized that Quebec’s vision of becoming a global leader in the green economy has come to fruition.
Out of 70 different locations in North America, Northvolt selected the site east of Montreal as the most suitable. Paolo Cerruti, co-founder of Northvolt, will lead the project as the CEO of Northvolt in North America, with its headquarters in Montreal. He cited Quebec’s unique access to 100% renewable energy and raw materials as the ideal foundation for its inaugural mega-factory outside of Europe.
Pollution subsidy?
However, the news has sparked concerns in the region regarding potential noise and pollution from the plant, as well as housing issues. A petition with 700 signatures has been submitted to the McMasterville municipal council to oppose the project.
This announcement follows a series of recent developments in Quebec’s battery sector, including an investment of over $640 million by Ottawa and Quebec for a new Ford EV plant in Bécancour, Que., just last month. Opposition parties in Quebec are questioning the province’s substantial investments in multinational corporations.
Haroun Bouazzi, energy critic for Québec Solidaire and the MNA for Maurice-Richard, stated, “With public investments of $1.37 billion, the [Legault] government must be transparent,” and emphasized that there are financial risks to Quebecers in this investment.
In response, Legault drew parallels to the massive hydro-electric dam projects undertaken by premier Robert Bourassa 50 years ago, suggesting that those initiatives faced skepticism similar to what this project is currently experiencing. Legault stressed the importance of the green economy for the next five decades, building on the legacy of Bourassa’s generation.
Frédéric Beauchemin, the Official Opposition’s economy critic, emphasized the need for a comprehensive approach and urged caution, stating, “Vision is important, long-term planning is important.” He advocated for investment in small- and medium-sized companies, which are essential for sustaining Quebec’s smaller communities.
In contrast, Bloc Québécois Leader Yves-François Blanchet welcomed the Northvolt plant’s announcement in his riding and highlighted its significance in establishing Quebec as a leader in the electrification of transportation. He also called for addressing residents’ concerns effectively.
Information for this briefing was found via CBC and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
